A build-operate-transfer (BOT) scheme is a type of financing for the long-term requirement of a government infrastructure project whereby the government provides a long-term concession to a private partner which arranges for the building, operation, and eventual transfer of the infrastructure in return for which the government agrees to pay an annual unitary payment to the private partner until the concession ends. Hospital BOT or its other variants (design-finance-build-operate-transfer, design-finance-build-operate-own, or others) is a form of performance based financing innovation since the concession agreement specifies the performance benchmarks that the contractor is legally obligated to meet in exchange for an annual unitary payment from the government, until the end of the concession (usually 15-20 years).
The NKTI Hemodialysis Center is a Php 54 million facility constructed as a Public-Private Partnership between a government hospital and a private investor. The project involved a long-term lease agreement with Freseneus Medical Care Philippines, Inc. as its private service provider.
Through this scheme, NKTI was able to acquire the latest technology in dialysis treatment thus, expanding its services to more patients. At the same time, the services provided in this new Hemodialysis Center are relatively more affordable since NKTI is a government hospital. In 2006, out of 92 BOT projects listed by the government, only the NKTI was listed for agreement focusing on health. Thus, there is still a large potential for this scheme to grow and help in increasing access to health services.
Read a case study on the National Kidney Transplant Institute (NKTI)/Hemodialysis Center here